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(Washington Post)   Why do rich people live in big houses? The answer may not surprise you   (knowmore.washingtonpost.com) divider line 157
    More: Obvious, great house, Uncle Sam, wealths, National Association of Home Builders  
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13200 clicks; posted to Main » on 28 Mar 2014 at 4:21 PM (21 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2014-03-28 03:00:03 PM
Tiny penises?
 
2014-03-28 03:10:23 PM
I am unconvinced of the causal relationships implied by this piece.

They live in them because they can afford them.  And because they want to live near people like themselves.   And tiny penises.

The tax thing is a benefit, not a cause.
 
2014-03-28 03:13:12 PM

Diogenes: They live in them because they can afford them. And because they want to live near people like themselves. And tiny penises


you know, we should do a study of penis size to house size

maybe it's an inverse relationship
 
2014-03-28 03:14:23 PM

somedude210: Diogenes: They live in them because they can afford them. And because they want to live near people like themselves. And tiny penises

you know, we should do a study of penis size to house size

maybe it's an inverse relationship


There are some penises even I don't want to look at.
 
2014-03-28 03:16:47 PM

Diogenes: There are some penises even I don't want to look at.


bring your tweezers :P
 
2014-03-28 03:52:04 PM

Diogenes: They live in them because they can afford them.


The tax benefits factor in to this calculus, however.  I wonder sometimes how much the mortgage tax benefits have affected the housing market, whether or not prices have gone up to compensate for the increased buying power of the borrowing public.  That is, at least among those that can take advantage of the deduction.

o/
 
2014-03-28 03:58:51 PM
Because you have to a place for your stuff.  The more money you have the more stuff you have the bigger house you need.
 
2014-03-28 04:01:08 PM
Because people like to show off. And rich people are able to show off more than us poor people. After you have enough money coming in to take care of all of your basic needs, what else are you going to do with more money? You're going to show off with it. The end.
 
2014-03-28 04:02:17 PM

somedude210: Diogenes: They live in them because they can afford them. And because they want to live near people like themselves. And tiny penises

you know, we should do a study of penis size to house size

maybe it's an inverse relationship


Just remember, due to the slight difference in physiology due to racial makeup, you'll need to account for racial demographics. Just sayin. Conclusions could be drawn. Drawn and posted to a porn site.
 
2014-03-28 04:04:00 PM
I don't really understand the tax benefit they're talking about. I have a home, but I deduct the mortgage insurance, not the square footage.
 
2014-03-28 04:04:42 PM

Gig103: I don't really understand the tax benefit they're talking about. I have a home, but I deduct the mortgage insurance, not the square footage.


Uh, that's mortgage interest. I don't qualify to deduct PMI, and it's already almost gone.
 
2014-03-28 04:17:27 PM

factoryconnection: Diogenes: They live in them because they can afford them.

The tax benefits factor in to this calculus, however.  I wonder sometimes how much the mortgage tax benefits have affected the housing market, whether or not prices have gone up to compensate for the increased buying power of the borrowing public.  That is, at least among those that can take advantage of the deduction.


Of course it factors in.  As do interest rates.  The average house will always cost what the average guy can pay on an average salary.  It has to be that way, otherwise there's nobody to buy the houses at the price that people want to sell them at, the market moves backwards, and people start losing their shiat.

I bought a house in 1998, at the tail end of what would be considered a higher interest rate period (5-6%, so at least compared to the intervening 15 years).  I bought at $150k.  That house is now worth about 600k.  The inflationary component in what my house is worth is almost all about interest rates- a 2-3% mortgage means that a potential purchaser can 'afford' (i.e: barely make payments on) a house on the order of 3x more expensive than they could previously.

I'm Canadian, so I don't know the full effect of the interest deduction. But I can imagine it having a huge distortionary effect on house prices.  In the early years of a mortgage where almost none of the payment is going to paying down the principle of the loan, that write off must be substantial.  And given that, it's hard to imagine that people wouldn't push the envelope of affordability, which settles the market at a much higher median than it would otherwise be at.

So yeah.  No deduction, higher interest rates, and the sticker price on a house would get cheaper, meaning people less likely to benefit from the deduction (i.e: lower income), might have a better shot at home ownership.  The whole mortgage interest deduction thing has always struck me as an odd American policy for exactly this reason, since it is ostensibly designed to increase home ownership.
 
2014-03-28 04:24:50 PM
To get to the other side?
 
2014-03-28 04:28:29 PM
As a middle class moderate sized home (less than 1000 Sq ft) owner I do not want anyone to take away my mortgage interest credit.

Tax the uber rich a bit more? I'm ok with that.

Tax people who work for a living? Not ok with that.
 
2014-03-28 04:28:33 PM
if you're paying someone to clean it anyway, why not?
 
2014-03-28 04:28:42 PM

Gig103: I don't really understand the tax benefit they're talking about. I have a home, but I deduct the mortgage insurance, not the square footage.


The idea is they buy a bigger house than they really need, because 1) they can afford it and 2) bigger houses cost more, so they get a bigger write-off.  Also if they own small businesses I think the house might act as collateral for a business loan, although I think this only works for non-incorporated businesses.
 
2014-03-28 04:29:13 PM
For the same reason a dog licks his balls and farkers fap?
 
2014-03-28 04:29:26 PM

somedude210: Tiny penises?


i1199.photobucket.com
 
2014-03-28 04:29:35 PM
If I were rich.

1)  Room to actually have things instead of just what I can fit in.

2) I love novels. I love bookshelves with hardbacks. I want to walk into a room full of them with a chair in the center and a side table for drinks.  Along with a sliding ladder to get to the shelves higher up than I can reach.  Sure I could have a standard one. but it's a sliding ladder and I'm a kid at heart.

3) theater room for movies and video game systems.  Complete with surround sound.

4) I think somewhere along the line I'd like to be married and have kids. So, more than 2 bedrooms.

5) cars, meh. I can live with drivable.
 
2014-03-28 04:31:07 PM
No.

/headline asks a question
 
2014-03-28 04:31:36 PM
Because they are assholes, that is why.
 
2014-03-28 04:31:46 PM
I can tell you this based upon my family experience. Rich people do not ever consider tax benefits when buying a house.

/checks pants
//alarmed by shrinkage
///it's cold out!
 
2014-03-28 04:32:00 PM
yeah, those tax credits are offered to people if they buy something in the inner city like detroit and houston and philadelphia because people aren't going to buy property there otherwise.  you don't see the suburbs offering tax credits.  you want to know why?  because you don't need to offer a tax credit to convince people to buy something in the suburbs.

there is parking available.  the crime is low.  the schools are good.  there are supermarkets nearby.

next to me, DC offers tax credits.  But only if you buy someplace where the traffic sucks, there is no parking, crime is high, schools are bad.  you don't get an extra room.  the credit makes up for the other inconveniences and costs that come with a home in the city.
 
2014-03-28 04:32:26 PM

Truther: As a middle class moderate sized home (less than 1000 Sq ft) owner I do not want anyone to take away my mortgage interest credit.

Tax the uber rich a bit more? I'm ok with that.

Tax people who work for a living? Not ok with that.


4.bp.blogspot.com
 
2014-03-28 04:33:00 PM
Some people start off with a smaller house or apartment and they increase the size of their dwelling as their salary increases. (I'm not sure how that squares with your penis theory).
 
2014-03-28 04:33:00 PM

Gig103: I don't really understand the tax benefit they're talking about. I have a home, but I deduct the

mortgage interest(I assume you mean interest not insurance), not the square footage.

If you can afford N$ a month on housing, tax deductions means you can spend N$+deductions, which could mean a bigger home (or afford a similarly sized home but in a better location, or maybe with better features. All things are not similar...)

I don't think deductions result in 1:1 relationship to larger homes. Just my opinion. For example, it might just increase the price of all homes, presuming all buyers have access to the same deductions.
 
2014-03-28 04:33:45 PM

jchic: Because you have to a place for your stuff.  The more money you have the more stuff you have the bigger house you need.


I see that you also subscribe to the George Carlin school of economic thought.
 
2014-03-28 04:33:53 PM
Tiny penii
in their pants
looks much bigger
when you dangle $100 bills from it
 
2014-03-28 04:34:20 PM

Truther: As a middle class moderate sized home (less than 1000 Sq ft) owner I do not want anyone to take away my mortgage interest credit.

Tax the uber rich a bit more? I'm ok with that.

Tax people who work for a living? Not ok with that.


The mortgage interest deduction (I don't think it's a tax credit) should be phased out over the next 30 years. The benefits of the deduction doesn't go to the home buyer. It goes to the home builder. It was that way when it was created in the 1930s and continues to be that way now. People buy homes at prices that they can afford. What they can afford is based on what the net amount is that they will pay, after all deductions, interests, etc are accounted for. Without the interest deduction, people will pay less for a home, and that is not good for the home builders. The net amount paid by the person would still be the same.
 
2014-03-28 04:34:21 PM
Makes it harder for the mobs to find them and drag them out to the guillotines WHEN The Great Backlash inevitably happens?
 
2014-03-28 04:34:53 PM
If I was rich I would make the largest room in the house a video game room (man cave) which is 40 ft by 40 ft.  windowless and reinforced for tornado protection.  Then have a outdoor kitchen for grilling.  But I would not have a house over 2000 square feet.  My walls would be of concrete forms but I can't expect having a house larger than that without it being a problem.
 
2014-03-28 04:37:05 PM
There was one bit in an old Richie Rich comic I remember as a kid. Part of the running gag in that comic was all the rooms that were in that Mansion. One day, Richie & friends stumbled across some lost workmen who were building yet another room, and it was found out that one day long ago they were told to keep building new rooms and no one ever found them and since the workmen were never told to stop, they just kept building one new room after another, day after day, year after year.
 
2014-03-28 04:39:00 PM
I bought an 1,100 sq ft house in 2000. Paid it off in 2010. It was perfect. Great location, size, had a garage, 1.5 bath. Then noisy people started moving into the neighborhood so I "upgraded" while interest rates were still low.

2,200 sq ft. of newer house that I'm proud to show off to my friends. That's the only thing it does for me, and that's not a lot.

Oh, well.
 
2014-03-28 04:39:08 PM
that was farking retarded

I want that small piece of my life back

//lude
 
2014-03-28 04:40:01 PM
My guest house:

www.spashrae.com
 
2014-03-28 04:40:58 PM
You only get the mortgage interest deduction on the first $1,000,000 of mortgage indebtedness.  While a million bucks is nothing to sneeze at, the truly rich buy tend to buy much more lavish homes than that.  The mortgage interest deduction primarily helps the middle class.  Oh and the way some farkers like to hate on the non-poor is just embarrassing.

DNRTFA
 
2014-03-28 04:41:14 PM

SlothB77: yeah, those tax credits are offered to people if they buy something in the inner city like detroit and houston and philadelphia because people aren't going to buy property there otherwise.  you don't see the suburbs offering tax credits.  you want to know why?  because you don't need to offer a tax credit to convince people to buy something in the suburbs.

there is parking available.  the crime is low.  the schools are good.  there are supermarkets nearby.

next to me, DC offers tax credits.  But only if you buy someplace where the traffic sucks, there is no parking, crime is high, schools are bad.  you don't get an extra room.  the credit makes up for the other inconveniences and costs that come with a home in the city.


Nobody lives in the inner cities anymore, it's too crowded.
 
2014-03-28 04:43:29 PM
If I'm paying for that extra room, I'm moving in.
 
2014-03-28 04:43:31 PM
There's not a person on Earth who wouldn't live in a huge house if he could afford it. That includes all those here making penis jokes.
 
2014-03-28 04:44:24 PM
Click bait, intended to get people riled up about "ZOMG THOSE RICH ARE SCREWING US AGAIN!!!!"

So because you're improving your home, or you buy a big home, it costs the government some money? I suppose so, a little bit tax-wise...but we have WAY bigger things to worry about regarding the tax code here in the US.
 
2014-03-28 04:45:09 PM
Not just houses with a lot of square footage. Tall houses with balconies to look down on a the serfs and their ranch houses.
 
2014-03-28 04:45:42 PM
Larger homes get proportionally bigger tax incentives because rich people live in larger homes, and rich people control the people who write the tax code.
 
2014-03-28 04:45:46 PM
I also disagree with the article. While there may be a relationship at some level I doubt tax breaks are a significant driver.

Homes are getting larger for a couple of reasons. But foremost is status. A big house tells the world you are a success. People buy them to impress other people. This is covered above with penis jokes.

Following status you have financing. We I bought my first house there weren't many mortgage products out there. You could choose 15-year or 30-year and you needed 20% down. Now you can get Jumbo mortgages, interest-only and some can go to 50 year terms. Some with only 5% down. I could have bought a much bigger house than I was allowed to in the 80s.

Lifestyle changes are a factor too. People don't go outside as much. This sells features like bonus rooms and extra bedrooms and dens. There is also the newer demand that each bedroom needs a walk-in closet and their own bathroom. (Snowflakes hate to share.)
 
2014-03-28 04:47:50 PM
Twenty dollars, same as in town?
 
2014-03-28 04:47:51 PM

Diogenes: I am unconvinced of the causal relationships implied by this piece.

They live in them because they can afford them.  And because they want to live near people like themselves.   And tiny penises.

The tax thing is a benefit, not a cause.


Point is, they can afford MORE of them (or more square footage, at least, because of the credit).
 
2014-03-28 04:48:18 PM
I was going to go with: When you have a big house, you have a place to throw impressive parties and socialize with lots of people. This allows you to A) improve your chances of making even more money by keeping in touch with all your business contacts, and B) get in the pants of attractive young women who come to parties thrown by rich guys with big houses.

However, "because they can" is also acceptable.
 
2014-03-28 04:48:48 PM
Those of us who enjoy the suburban and rural lifestyle buy bigger houses because space is REALLY nice to have for all kinds of reasons.   Privacy.  Hobbies, room to breathe.  Entertaining.    Having lived in everything from a tiny converted garage studio behind a house in college to the current 3 bedroom house, it feels good to be able to walk out of one room and into another room to do something else.   It's psychological.   The idea (for me anyway) isn't to have stuff to fill it up, it's to have space and light so my brain doesn't feel confined.

It's a choice that shouldn't be knocked.   Modern homes comply to the latest building codes and are often certified for certain levels of efficiency, which people look for because better insulated homes mean a much lower gas and electricity bill.   (double paned windows, thick insulation, up to date water heater, etc.)

The article smacks of the typical big city holier-than-thou attitude.   I don't complain about your urban lifestyle, don't complain about my rural lifestyle.    There's plenty of space to go around.
 
2014-03-28 04:49:25 PM

cwolf20: If I were rich.

1)  Room to actually have things instead of just what I can fit in.

2) I love novels. I love bookshelves with hardbacks. I want to walk into a room full of them with a chair in the center and a side table for drinks.  Along with a sliding ladder to get to the shelves higher up than I can reach.  Sure I could have a standard one. but it's a sliding ladder and I'm a kid at heart.

3) theater room for movies and video game systems.  Complete with surround sound.

4) I think somewhere along the line I'd like to be married and have kids. So, more than 2 bedrooms.

5) cars, meh. I can live with drivable.


Yes.  I want a library with really high ceilings, tall windows and a fireplace with deep leather chairs on either side.  Oh, and one of the standing globes with a bar inside.  And a conservatory.
 
2014-03-28 04:51:39 PM

rev. dave: If I was rich I would make the largest room in the house a video game room (man cave) which is 40 ft by 40 ft.  windowless and reinforced for tornado protection.  Then have a outdoor kitchen for grilling.  But I would not have a house over 2000 square feet.  My walls would be of concrete forms but I can't expect having a house larger than that without it being a problem.


You want 75% of your normal-sized house to be a dark Man Cave? To each his own, I guess.
 
2014-03-28 04:52:45 PM

somedude210: Tiny penises?


25.media.tumblr.com
 
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